Senate Republican tax bill passes 'SALT' deduction cap of $40,000. Here's who would benefit.

Senate Republicans on Tuesday passed changes to the federal deduction for state and local taxes, known as SALT, as part of President Donald Trump’s multitrillion-dollar spending bill

Senate Republicans on Tuesday passed changes to the federal deduction for state and local taxes, known as SALT, as part of President Donald Trump’s multitrillion-dollar spending bill.

Passed via the Tax Cuts and Jobs Act, or TCJA, of 2017, there’s a $10,000 limit on the SALT deduction through 2025, which has been a pain point for certain lawmakers in high-tax blue states.

If enacted, the Senate bill would lift the cap to $40,000 starting in 2025, with the phaseout starting over $500,000 of income. Both figures would increase by 1% yearly through 2029 and the $40,000 limit would revert to $10,000 in 2030.

By contrast, the House-approved measure under the One Big Beautiful Bill Act would offer the higher limit for a longer window. The $40,000 cap would begin in 2025, with the same $500,000 income phaseout, and both figures would rise by 1% annually from 2026 through 2033.

The Senate’s legislation still needs House approval before the final bill can be delivered to Trump’s desk. It was unclear Tuesday whether moderate House Republicans would accept the Senate’s proposed SALT deduction changes.